STATE BANCORP, INC. NONQUALIFIED STOCK OPTION AGREEMENT
STATE
BANCORP, INC.
NONQUALIFIED
STOCK OPTION AGREEMENT
dated as
of November 13, 2006, (the "Date of Grant"), between STATE BANCORP, INC.
(the
"Company") and XXXXXX X. X’XXXXX (the "Grantee").
1. Grant
of Options.
Pursuant to the Employment Agreement dated November 6, 2006 (the “Employment
Agreement”) by and among the Grantee, the Company and State Bank of Long Island
(the “Bank”), the Company hereby grants the Grantee options (the “Options”) to
purchase 164,745 shares of its common stock, par value $5.00 per share
(the
"Optioned Shares").
2. Term
of Options.
The
Options shall be an effective and binding obligation of the Company only
during
the Option Term (as hereinafter defined) and, upon the expiration of the
Option
Term, the Options shall become null and void to the extent of the Optioned
Shares not theretofore purchased. The "Option Term", for purposes of this
Agreement, shall be the period commencing with the Date of Grant and ending
with
the earlier of the following dates: (i) the tenth anniversary of November
6,
2006 (the “Announcement Date”) or (ii) the Company’s termination of the
Grantee’s employment with Cause (as defined in the Employment
Agreement).
3. Exercise
Price.
The
exercise price per share shall be $17.84.
4. Exercise
of Options.
Subject
to the terms and conditions set forth in this Agreement, including the
accelerated vesting and forfeiture provisions set forth in Section 5 below,
the
Options will become exercisable ("vest") as follows: twenty (20%) percent
of the
Optioned Shares shall vest and become exercisable on each anniversary of
the
Announcement Date until all of the Optioned Shares have become exercisable.
5. Termination.
Notwithstanding anything to the contrary herein, the following provisions
shall
govern the treatment of the Options following the termination of the Grantee’s
employment:
a.
Death.
If the
Grantee’s termination of employment is due to death, the entire unvested portion
of the Options shall vest as of the date of the Grantee’s
death.
b.
Disability.
If the
Grantee’s termination of employment is due to the determination of the Grantee’s
disability pursuant to Section 10 of the Employment
Agreement,
the
Options shall continue to vest as if the Grantee remained in the active
service
of the Company and the Bank and, in the event of the Grantee’s death prior to
full vesting of the Options, any unvested portion of the Options shall
vest as
of the date of the Grantee’s death.
c.
Termination With Cause.
If the
Grantee’s employment is terminated by the Bank with Cause (as
defined
in the
Employment Agreement), any
unexercised Options, whether or not vested, shall be forfeited. If the
Board of
Directors of the Company (the “Board”) shall have temporarily suspended the
Grantee’s duties pursuant to the Employment Agreement while any proceeding to
discharge the Grantee with Cause is pending, the Board may, by written
notice to
the Grantee, also temporarily suspend the exercise of the Option.
d.
Termination without Cause.
If the
Grantee’s employment is terminated by the Bank for any reason other than Cause
or disability, any unvested Options shall vest as of the date of such
termination of employment.
e.
Resignation with Good Reason.
If the
Grantee resigns with Good Reason (as defined in the Employment Agreement),
any
unvested Options shall vest as of the date of termination of
employment.
f.
Resignation without Good Reason.
If the
Grantee resigns without Good Reason, any
unvested Options shall be forfeited and shall terminate and be of no
further
force or effect as of the date of termination of employment.
6. Method
of Exercise.
An
Option may be exercised in whole or in part at any time by written notice
to the
Company, at its principal office at 000 Xxxxxxxx Xxxxxx, Xxx Xxxx Xxxx,
Xxx Xxxx
(or such other place as may hereafter be designated by the Company), which
notice shall specify the number of Optioned Shares as to which the Grantee
desires to exercise. The notice shall be accompanied by an unendorsed certified
or official bank check or money order for the full exercise price, in United
States dollars, payable to the order of the Company or, if the Grantee
so
elects, in whole or in part by delivery to the Company of shares of unrestricted
common stock of the Company then owned by the Grantee, provided such shares
have
been beneficially owned by the Grantee for at least one (1) year. Any shares
to
be used in full or partial payment of the exercise price shall be valued
at the
Fair Market Value of the shares on the date of exercise of the Option.
“Fair
Market Value” of a share for purposes of this Agreement shall mean (i) if, on
such date, the Company’s stock is listed on a securities exchange or quoted on a
market system, the closing price of a share of stock as quoted on such
securities exchange or market system constituting the primary market for
the
Company’s stock on the last trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Company
deems
reliable or (ii) if, on such date, the Company’s stock is not listed on a
securities exchange or quoted on a market system, the Fair Market Value
of a
share of the Company’s stock shall be as determined by the Board of Directors of
the Company in good faith without regard to any restriction other than
a
restriction which, by its terms, will never lapse. In the event the exercise
price is to be paid in full or in part by surrender of the Grantee’s shares, in
lieu of actual surrender of certificates representing shares owned by the
Grantee the Company may waive such surrender and instead deliver to or
on behalf
of the Grantee a certificate representing a number of shares equal to the
total
number of shares as to which the Option is then being exercised less the
number
of shares which would otherwise have been surrendered by the Grantee to
the
Company. The Company’s Board of Directors (or any committee of such Board of
Directors with authority over the Company’s stock option plans) may permit the
Grantee to make payment by wire transfer and may permit electronic delivery
of
notice in lieu of written notice. Notwithstanding the foregoing, an Option
may
not be exercised by tender to the Company, or attestation to the ownership,
of
shares to the extent such tender or attestation would constitute a violation
of
the provisions of any law, regulation or agreement restricting the redemption
of
the Company’s Stock.
7. Tax
Withholding.
No
shares will be issued pursuant to the exercise of an Option unless and
until the
Grantee pays to the Company, or makes provision satisfactory to the Company
for
payment of, any federal, state or local withholding taxes required by law
to be
withheld in respect of an Option. The
Grantee shall have the right to direct the Company to deduct from the shares
issuable to the Grantee upon the exercise of an Option, or to accept from
the
Grantee the tender of, a number of whole shares having a Fair Market Value
equal
to all or any part of the tax withholding obligations of the
Grantee.
8. Compliance
with Securities Law.
The
issuance of shares pursuant to this Agreement shall be subject to compliance
with all applicable requirements of Federal, state and foreign law with
respect
to such securities and the requirements of any stock exchange or market
system
upon which the Company’s stock may then be listed or quoted. In addition, no
Option may be exercised or shares issued pursuant to this Agreement unless
(a) a
registration statement under the Securities Act of 1933 shall at the time
of
such exercise or issuance be in effect with respect to the shares issuable
or
(b) in the opinion of legal counsel to the Company, the shares issuable
pursuant
to this Agreement may be issued in accordance with the terms of an applicable
exemption from the registration requirements of the Securities Act. As
soon as
practicable, the Company shall prepare and file with the Securities and
Exchange
Commission a registration statement on Form S-8 covering a sufficient number
of
shares of the Company’s common stock to provide for all of the common stock
contemplated to be issued the under this Agreement. Thereafter, the Company
shall take all actions required to maintain the effectiveness of such
registration statement until all common stock issuable under this Agreement
has
been so issued or the Option Term has expired. Subject to the Company’s
compliance with the foregoing provisions of this Agreement, the inability
of the
Company to obtain from any regulatory body having jurisdiction the authority,
if
any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance of any shares hereunder shall relieve the Company of any liability
in
respect of the failure to issue such shares as to which such requisite
authority
shall not have been obtained.
9. Reclassification,
Consolidation, or Merger.
In the
event of any recapitalization, forward or reverse split, reorganization,
merger,
consolidation, spin-off, combination, repurchase, or exchange of Company
stock
of the same class as the Optioned Shares for other securities, stock dividend
or
other special and nonrecurring dividend or distribution (whether in the
form of
cash, securities or other property) that has a material effect on the fair
market value of the Company stock, liquidation, dissolution, or other similar
corporate transaction or event that has a material effect on the fair market
value of the Company stock, such that an adjustment is appropriate in order
to
prevent the dilution or enlargement of the rights of the Grantee with respect
to
the Options, the Company's Board of Directors or any committee of such
Board of
Directors with authority to administer the Company's stock option plans
shall,
in such manner as it may determine, adjust any or all of (i) the number
and kind
of securities underlying the Options and (ii) the exercise price of the
Options,
to prevent such dilution or enlargement.
10. Rights
Prior to Exercise of Options.
The
Grantee shall have no rights as a shareholder with respect to the Optioned
Shares as to which the Options shall not have been exercised and payment
made as
herein provided, and shall have no rights with respect to such shares other
than
those rights that are expressly conferred by this Agreement.
11. Nonassignability.
This
Options shall not be transferred, assigned, pledged or hypothecated in
any way
(whether by operation of law or otherwise) by the Grantee otherwise than
by will
or laws of descent and distribution and shall be exercisable during his
or her
lifetime only by the Grantee, and shall not be subject to execution, attachment
or similar process. The Grantee may, by written notice delivered to the
Company
prior to the Grantee's death, designate a beneficiary or beneficiaries
who
shall, upon the Grantee's death, succeed to his rights in respect of any
unexercised Options and may revoke a prior designation by similar subsequent
notice.
12. Binding
Effect, Modification.
This
Agreement is binding upon the heirs, executors, administrators, successors
and
permitted assigns of the parties hereto. This Agreement may only be altered,
modified or amended by a writing signed by the Company and the
Grantee.
13. Non-qualified
Stock Options.
The
Options are not intended to be incentive stock options within the meaning
of
Section 422(b) of the Internal Revenue Code.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the Date of
Grant.
STATE
BANCORP, INC.
BY:___________________________
______________________________
XXXXXX
X.
X’XXXXX (Grantee)
(Form
of
Notice to be Given When
Foregoing
Options is Exercised)
State
Bancorp, Inc.
000
Xxxxxxxx Xxxxxx
Xxx
Xxxx
Xxxx, Xxx Xxxx 00000
The
Undersigned, Xxxxxx
X.
X’Xxxxx, as Grantee under the Non-Qualified Stock Option Agreement dated
as of
November 13, 2006, hereby exercises the option contained in said Agreement
for
the purchase of __________ shares of the common stock of the Company. The
undersigned delivers to you herewith in payment of the shares:
__________a
certified official bank check or money order payable to the order
of
the Company, in the amount of $______________;
________
shares of unrestricted common stock of the Company.
Dated:
_______________, 2006
__________________________________
Signature
__________________________________
Address
__________________________________
Note:
If
the option is exercised either by a legatee under the Grantee's last will
or by
the personal representative of the Grantee
or
designated beneficiary of the Grantee, evidence must be submitted satisfactory
to the Company that such person is the personal representative or beneficiary,
as applicable of the Grantee.
